Budget 2026: Top officials’ insights

The Union Budget 2026-27 signifies a significant shift from reactive to strategic economic planning. Industry experts have shared their insights on how this budget could impact various sectors, businesses, investors, and the overall economy.

Raamdeo Agrawal, Chairman & Co-founder of Motilal Oswal Financial Services Ltd, views this budget as a game-changer for India’s digital future. He highlights the 100% tax exemption on data centers until 2047 as a substantial move that could pave the way for the nation to become the ‘AI Factory of the World.’ With increased focus on AI adoption and substantial investments in power, cables, and infrastructure, India is gearing up for a digital evolution reminiscent of the 1990s software boom. Agrawal also underscores the critical aspect of widening the IT services framework to provide transfer pricing clarity for Global Capability Centers (GCCs), showcasing India’s readiness for high-tech business ventures. However, he cautions that the Securities Transaction Tax (STT) increment and the elimination of dividend offsets may pose short-term challenges by limiting market liquidity and leverage, affecting certain types of trades. Despite these challenges, Agrawal underscores the importance of a modest 4.3% fiscal deficit and a significant capital expenditure of 12.2 lakh crore, emphasizing that India’s long-term growth trajectory remains robust, backed by a strong earnings narrative.

Bhavesh Shah, Managing Director and Head of Investment Banking at Equirus Capital, emphasizes that the India Budget 2026 underscores the government’s commitment to steady progress, policy consistency, and the enduring vision of a developed India. The budget’s principal strength lies in its predictability, reinforcing a decade of progressive reforms without introducing abrupt policy shifts. This steady approach is crucial as India aims for a sustainable real GDP growth rate of 6.5–7% in the medium term. Shah applauds the budget’s fiscal discipline, maintaining a fiscal deficit below 4.5% of GDP in the upcoming two years while prioritizing capital expenditure. The continuous focus on capital expenditure, exceeding 3.3% of GDP, is expected to trigger a positive economic impact, with every rupee spent on public infrastructure projected to generate 2.5–3 rupees of incremental GDP, thereby encouraging private investments.

The budget accentuates the importance of the manufacturing sector in India’s growth story. Various Production-Linked Incentive (PLI) schemes for electronics, pharmaceuticals, chemicals, and renewables have been refined to enhance scale, localization, and global competitiveness. India aims to boost its manufacturing exports, aiming to surpass $1 trillion by the end of the decade, positioning the country as a key player in global supply chains. The budget also offers support for traditional and indigenous sectors, with a focus on sectors like textiles, Ayurveda, medicinal plants, and sandalwood, aiming to boost export potential through modernization and integration into value chains.

In essence, the Union Budget 2026-27 underscores India’s strategic initiatives to boost economic growth, support digital transformation, and enhance its position in the global market by fostering innovation, sustainability, and a conducive business environment.